Efficiency is one of the main drivers for any company. It is the increase of shareholder returns by delivering profits at reduced costs. Besides striving hard to generate the income (most banks are affected by the recent financial crisis) , they should take a hard look at reducing cost. Two main cost centers they should address are the operations and IT departments.
Through innovative use of technologies like utility computing and virtualisation, banks can reduce costs. and improved speed and service.
The Lehman brothers' saga provided the banks with invaluable experience and insight on communication and service quality. They should also take this opportunity to tighen the process of selling financial products especially if they are to continue offering complex derivative products. Care should be taken to balance risk and efficiency.
Read What should the banks do next? Part 1
Showing posts with label Banking. Show all posts
Showing posts with label Banking. Show all posts
Sunday, November 16, 2008
What should the banks do next? Part 2
What should the banks do next? Part 1
Based on Wikipedia, the free encyclopedia, A banker or bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money.
Of course, there is the treasury (investment) function which in recent years is the Cash Cow of most banks.
For many years, banks have been growing at break-neck speed. The tremendous growth has produced redundancies and inefficiencies. It was not a priority to be dealt with at that time. They were more concern with more growth, riding on unprecedented economic prosperity.
Of course, there is the treasury (investment) function which in recent years is the Cash Cow of most banks.
For many years, banks have been growing at break-neck speed. The tremendous growth has produced redundancies and inefficiencies. It was not a priority to be dealt with at that time. They were more concern with more growth, riding on unprecedented economic prosperity.
A series of U.S. legislative moves in the 1980s made subprime lending possible. Mortgage securitization made the banking scene more complex than ever. Eventually the bubble burst, the subprime-led financial tsunami swept through the world affecting the real economy.
What should the banks do next?
The banking institutions should go back to the basics and take this time to increase steady revenue (interest and non-interest income), reduce cost, increase efficiency and improve service quality.
*to be continued in part 2*
What should the banks do next?
The banking institutions should go back to the basics and take this time to increase steady revenue (interest and non-interest income), reduce cost, increase efficiency and improve service quality.
*to be continued in part 2*
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